I agree, a high debt-to-equity ratio is acceptable for banks, NBFCs, and even stock brokerage firms. It doesn’t matter whether the funds are borrowed from the RBI or lent from their own books.
In IREDA’s case, higher debt isn’t a red flag—it’s a strategic tool. As a lender, its profitability depends on the amount of debt it can take on and lend out profitably. The margin between the interest it pays on its debt and the interest it earns from loans to renewable energy companies is how it generates income. Therefore, higher debt, when managed properly, allows IREDA to expand its lending portfolio and grow its profits.
My earlier response was intended as a general statement. Of course, the evaluation of individual stocks is something I leave to the author of this thread.
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